Dutch Gaming Authority increases potential fines and imposes a fine of EUR 400,000 on two operators

The Dutch Gaming Authority (DGA) has amended its policy relating to potential fines for operators. The new policy will apply from 1 March 2019, and replaces the previous policy dated 1 August 2015.

The new rules increase the general fine for providing illegal gambling services to Dutch residents from EUR 150,000 to EUR 200,000. The specific fine for an operator can be even higher, depending inter alia on the following:

1. number of (illegal) websites;
2. number of games made;
3. prices paid by Dutch consumers;
4. minimum deposits and bets placed;
5. bonuses and VIP offers;
6. costs in relation to (temporary) inactive accounts;
7. if live betting is offered; and
8. false or irrelevant statements by the operator in relation to betting licences and supervision by the betting authorities.

The standard amount a fee can be increased by for a breach of 6, 7 or 8 is a further EUR 75,000. Additional amounts pertaining to the other circumstances set out above are not pre-defined and the DGA has discretion to decide the applicable amount.

Two operators fined EUR 400,000

The DGA announced that two illegal gambling operators were recently sanctioned (under the previous iteration of the sanctioning policy). In a 4 January 2019 ruling, the DGA fined Exinvest Limited and 1X Corp N.V. EUR 400,000 each for illegally offering online games of chance in the Netherlands. It is currently prohibited to offer online gambling services to Dutch residents, although this will change if the Remote Gambling Bill, recently adopted by the Dutch Senate, comes into force at the end of 2020 or the beginning of 2021.

Until the new remote gambling legislation applies, the DGA is taking action against operators who specifically target Dutch consumers via gambling websites. To determine which operators the DGA should target, it has developed so-called 'prioritisation' criteria. According to these criteria, the DGA will focus on gaming websites that use a .nl domain, are in the Dutch language, advertise over Dutch media, offer certain payment methods popular with Dutch consumers (such as Ideal), and/or fail to employ technology to block Dutch IP addresses (i.e. geo-blocking).

In its investigation into Exinvest Limited and 1X Corp N.V., the DGA established that they had offered casino games such as roulette and blackjack as well as sports betting, lotteries and slots games between 16 February 2018 and 26 July 2018. These games were offered on the 1xbet.com and xbet-1.com websites, which were registered and exploited by either Exinvest Limited or 1X Corp N.V. According to the DGA, the operators were undeniably targeting the Netherlands as the websites were accessible via a Dutch IP address, made available in the Dutch language and permitted payment via iDeal.

By offering these games of chance to Dutch residents, Exinvest Limited and 1X Corp N.V. infringed the Dutch Betting and Gaming Act. In determining the EUR 400,000 fine, the DGA took into account the seriousness of the violation, the number of websites and games offered, the nature of the prizes that could be won, and the maximum stake, withdrawal, bonuses and promotions included in these games. The DGA also took into account the fact that player accounts registered by the DGA in relation to betting on the two websites could also be used on 83 other gambling websites – which resulted in an extra amount added to the general fine.

As a consequence, Exinvest Limited and 1X Corp N.V. will not immediately be able to acquire a Dutch licence when the Remote Gambling Bill comes into force. This is due to the Dutch Senate's decision to introduce a so-called “blackout period” of two years, during which no licence should be granted to operators that have actively and specifically been (illegally) targeting the Dutch market.

It is still not clear when the blackout period for these operators will commence, but it will apply to Exinvest Limited and 1X Corp N.V. Similar sanctions for other illegal operators can be expected in the near future, as the DGA has already announced that it will continue to pursue enforcement action against illegal operators until the new legislation comes into force.

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See this Law-Now article on the adoption of the Remote Gambling Bill.